Elder Fraud With Gift Cards Is On The Rise


Table displaying gift card totaling $681,498.77

The elderly population is vulnerable to financial scams.

Case Study: Colleyville Police Department

According to a survey from AARP, the advocacy group for older Americans, the latest percentage of gift card fraud against the elderly has increased 74% since the pandemic started. Perpetrators have preyed on them with two common scenarios. Gift card payment scams which happen when a criminal convinces a consumer to pay a fake financial obligation, by purchasing gift cards and sharing the numbers off the back, and zero-value gift cards which is when a consumer has given or received a card with no funds on it.
In these scams, criminals convince targets that they need to purchase a gift card, sometimes called an electronic voucher, to pay bills, taxes, or some other financial obligation. The fraudster asks for the information on the back of the card so they can collect the prepaid value or some other financial obligation.

Due to this increase, law enforcement has also seen a rise in the number of cases that they come across. A good example of this is the Colleyville police department who broke up an Asian money laundering ring that scammed more than $3M out of victims across the U.S. Police charged them with engaging in organized crime, exploitation of the elderly, money laundering and theft from the elderly.

The investigation began in March when someone reported being tricked into buying thousands of dollars in gift cards after being told they owed money for an antivirus scan.

Authorities eventually uncovered several gift card scams that victimized people across the United States and eventually transferred the money to China. The scammers would redeem the gift cards in under four minutes after they were purchased and, in many cases, would redeem them in different states than they were purchased in.
Authorities confiscated more than $681,000 worth of gift cards.
"These arrests are a small victory in a complex investigation that has targeted a large portion of the population, including many elderly victims," Colleyville police Chief Michael C. Miller said in a written statement.

ERAD's cutting-edge solution gives law enforcement agencies the power to read cards, freeze and seize funds associated with illegal or illicit activities. They can then use the platform to recover money from plastic cards or peer-to-peer payment applications once necessary access has been established. Being a cloud-based subscription software, ERAD is easy to implement and is accessible for law enforcement officers through tablets, mobile devices, or computers.

If you are interested in learning more about this case please feel free to call Detective Jeff Prater, Federal Task Force Officer, US Secret Service, Special Investigations Unit, Colleyville Police Department
at JPrater@colleyville.com.

Also, please beware of calls concerning the IRS (account has been tampered with), police departments (warrants) and sweepstakes winnings that are asking you for some type of payment. These are a few of the most common scams.



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